IKEA- THE GLOBAL RETAILER - Essay Example

1) IKEA is profiting from global expansion by operating in more than one country. It has suppliers from different countries which mean that the company has diversified its supplies and if something bad happens in one region, it can be countered by a better effort in the other. Hence, IKEA does not have all its eggs in one basket. Hence, IKEA is profiting from its smooth operations. Similarly, by operating in more than one country, IKEA has a larger population to sell its products too. Larger population means that IKEA can earn more revenue and more profit.

All of this is helping IKEA in becoming more stable and profitable business and all of this has come about due to its excellent policies and quick decisions to sell its products worldwide. 2) IKEA initially started by offering one type of products to all market. However, it quickly realized that one types of products won’t do well in all markets. Hence, IKEA decided to customize its products according to different countries it was operating in. It started producing different products for different regions depending on the demand in these regions and customer’s preference for sizes and design.

This proved to be a success and is an excellent example of how IKEA turned its weakness of mass production into strength by introducing different versions of each product depending on the type of market it was operating in. This helped IKEA selling its products to a larger audience and hence the business flourished. Other strengths of IKEA were strong brand name, strong financial health and great entrepreneurial skills offered by Mr. Ingvar Krampad. The weaknesses of the company were lack of diversification, one type of products and lack of initiative.

However, the company turned all of its weaknesses into strength by moving into a global market. 3) IKEA learnt a lot from its operations in America and other countries around the world. First of all IKEA realized that it need to market its products differently in each market due to different level of customer’s acceptance and preference in different countries. As a result, IKEA started producing different products for each region and was successful. IKEA also learnt a way to make sure that its customers spend more time in its stores.

They offered childcare and a café service. This way they ended up turning consumer surplus into sales and IKEA was able to earn large amount of revenues as a result and became more profitable. Other than that I believe that IKEA can use systems like CRM and other marketing tools to make sure that it does not lose out its customers in the future and to remind them about new sales promotions and other offers that would tempt the customers to buy more from IKEA.